Do you have $500? 2 Top Growth Stocks Ready for a Bull Market

The stock market has kept investors in the lurch over the past few years, plummeting at times and soaring at others. 2024 is already off to a strong start, but no one can predict exactly what the markets will do in the coming weeks and months.

But if you’re investing in quality companies that can deliver long-term growth, there’s no need to try to predict what the market will do in the short term. Market timing is a strategy that rarely brings meaningful returns.

Even if you only have a relatively small amount to invest, such as $500, you can become a part owner in a business that you deem worth investing in. Here are two top stocks that could benefit from a continuing bull market and deliver successful returns over the next five to 10 years.

1. Teladog Health

Teladoc Health (TDOC 0.46%) It is not receiving a high evaluation from investors, with its stock price falling more than 30% since the beginning of this year. As a shareholder of this stock, which has endured continued turmoil amid shifting investor sentiment over the past few years, I can attest that it’s been an ugly ride.

Why do I still own this stock? Because I still believe in the fundamental value proposition of this business, its leadership in a broad and growing market, and the growing demand for the solutions this platform can ideally provide to the global healthcare consumer base.

That’s not to say this stock is for everyone, but for investors with a diversified portfolio looking to capitalize on the future of the telehealth industry, it looks like Teladoc could be a significantly undervalued buy with significant long-term potential.

And when I say long term, I’m not talking about the next few years. I’m talking about the next 5 to 10 years. Looking at Teladoc’s performance over the past few years, the steep impairment charges associated with pandemic-era acquisition write-downs and declining revenues do not paint a good picture. However, it is important to take these elements one by one.

Although these impairment charges had no impact on Teladoc’s balance sheet, they were non-cash in nature and were not actual operating losses. In fact, most of the net losses recorded on Teladoc’s balance sheet over the past few years have been non-cash expenses. Teladoc also continues to reduce its net loss, with a net loss of $220 million for all of 2023, compared to just under $14 billion in 2022.

Sales growth suggests that Teladoc is at a more mature stage of its business than it was a few years ago, and its pandemic-level growth trajectory is unlikely to be sustainable in the long term. Still, there is growth. In 2023, Teladoc generated revenue of $2.6 billion, an 8% increase over the previous year. For the 12 months, operating cash flow totaled $350 million, an 85% increase over the prior year, while free cash flow totaled $194 million, an increase of 1,041% from a year ago.

Comparing those revenue numbers to Teladoc’s revenue in 2019, before the pandemic, that’s an increase of about 370% over four years. Not too shabby. The stock itself is currently trading at a price-to-sales multiple of 0.9. Even a small investment in this stock can yield long-term profits for patient investors.

2. Green Thumb Industry

Green Thumb Industry (GTBIF 4.13%) A cannabis grower and retailer specializing in medicinal and recreational products. As of this writing, the company operates 92 retail stores nationwide in more than a dozen different markets.

Green Thumb has focused its operations heavily on some of the most lucrative cannabis markets in the United States. These markets include states like Florida, the largest medical cannabis market in the U.S. and which recently opened its 15th dispensary. It also boasts a notable presence in other key markets such as Illinois, Massachusetts, Minnesota, and Nevada.

It’s no secret that cannabis legislation in the United States is incredibly fragmented. The lack of federal legalization and mixed legal restrictions on medicinal and recreational use across the country have created a difficult operating environment for companies in this industry. Some are floundering. Other companies, like Green Thumb Industries, are slowly but surely expanding their presence in their core target markets while also diversifying across both medical and adult products.

Green Thumb Industries has the unique distinction of being one of the few marijuana businesses to show consistent sales growth and profitability under Generally Accepted Accounting Principles (GAAP). In 2023, the company generated revenue of $1.1 billion, a 4% increase from 2022.

Net profit for the 12 months was $36 million, three times the profit reported in the previous year. Additionally, the company brought in operating cash flow of $225 million in 2023, a notable 42% increase from 2022.

Over the past five years, Green Thumb Industries’ annual revenue has grown 90%, with annual revenue growing 142% over the same period. Investing in the marijuana space requires a certain level of risk appetite. But if you have the cash to invest as part of a well-diversified basket of stocks, this profitable stock looks like an excellent choice in a promising industry that’s still in its infancy.